Roth IRA

[ladydi233]

I have a client that converted a 457 Roth in 2021 to a Roth IRA, she then took out a distribution in 2022.  The distribution shouldn't be taxable but she does owe the 10% penalty.  I can't figure out in the Proseries system to just figure the penalty without having to take the full distribution.

[Just-Lisa-Now-]

You need the ROTH basis in there, I think theres a quickzoom button right on the 1099R worksheet if you scroll down.

[qbteachmt]

Did your taxpayer already have this (or any other) Roth IRA account for at least 5 years before taking this distribution? There are a bunch of rules for Roth distribution, including various 5-year rules:

https://www.investopedia.com/are-roth-ira-distributions-taxable-5220750

[ladydi233]

She rolled it from a 457 roth to an IRA roth last year, so she hasn't met the 5 year rule tes.

[taxes96786 · Accepted solution]

You need to make a calculation adjustment. Had the interest been paid on the account before transfer? You may need to include that in the adjustment.